The first riders crossed the finishing line in the East Flemish town of Oudenaarde just after 5pm.
25-year-old Bettiol, who rides for EF Education First Pro Cycling, finished the 267km course with a time of 6:19:00.
The EF (Education First) rider attacked on the penultimate cobbled hill of the 270-km, one-day race and never looked back as a reduced chasing pack were left fighting over second place.
Denmark's Kasper Asgreen finished second for the Deceuninck-Quick Step team, whose best hope, favourite Zdenek Stybar, cracked with 27 kms left. Norway's Alexander Kristoff took third place.
After showing good form in the GP E3 earlier this month, Bettiol, 25, became the first Italian to win the 'Ronde' since Alessandro Ballan in 2007.
Defending champion Niki Terpstra abandoned the race when he crashed 157 kms from the line.
The Dutchman suffered concussion and lost consciousness before being taken to hospital.
His Team Direct-Energie doctor said Terpstra was 'fine' but added that he would not be able to race in next Sunday's Paris-Roubaix, a race he won in 2014.
The Tour of Flanders is the second of five 'Monument' classics in the season, after Milan-San Remo and before Paris-Roubaix, Liege-Bastogne-Liege and the Tour of Lombardy.
The first 10 cyclists across the finishing line
1. Alberto Bettiol (Ita/EF1) 267.7 km in 6h19:00 (average speed 42;38 km/h)
2. Kasper Asgreen (Den/DQT) 0:13 seconds behind
3. Alexander Kristoff (Nor/UAD) 0:16
4. Mathieu van der Poel (NL/COC)
5. Nils Politt (Ger/TKA)
6. Michael Matthews (Aus/SUN)
7. Oliver Naesen (Bel/ALM)
8. Alejandro Valverde (Spa/MOV)
9. Tiesj Benoot (Bel/LTS)
10. Greg Van Avermaet (Bel/CPT)